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The conversion tools in ArcToolbox and the DXFARC command in ArcInfo Workstation command line both fail to convert AutoCAD 2000 and later version files into coverages.
The DXFARC command in ArcInfo Workstation only supports DXF files through version 14. ArcInfo Workstation will not have further enhancements made to it, so AutoCAD 2000 and later DXF file versions cannot be converted to a coverage format.
There are two options to convert AutoCAD 2000 and later versions to an ArcInfo coverage.
Knowledge Base article 27540, linked under Related Information, includes useful information about managing ArcInfo coverages and the coverage data model.